World markets stage mixed comeback

TOKYO — Battered world financial markets attempted to reclaim lost territory Wednesday with mixed success.

Tokyo’s benchmark Nikkei 225 index gained 570.13 points, or 3.20%, closing at 18,376.83. The broader Topix index finished with a 3.23% gain.

While stocks in China ended the trading session lower, the losses were not as dramatic as seen in recent days.

The Shanghai composite index — now down over 40% since mid-June — climbed nearly 3% in afternoon trading before closing down 1.3% at 2, 927.29.

In Europe, the major regional benchmarks were all down about 2% in early market activity. U.S. stock futures pointed modestly higher.

Chinese regulators on Tuesday slashed interest rates and eased banking requirements, helping to fuel enthusiasm or at least ease anxieties.

"A certain calm has descended on Asian markets today, allowing traders to catch a much-needed breath," Chris Weston, chief market strategist at IG, said in a market note. But he added, "It still feels as though volatility can break out at any time."

Earlier, Kazuhiro Takahashi, chief economist for Daiwa Securities in Tokyo, told national broadcaster NHK that world markets are seeing a correction from the boom in China’s stock markets, which climbed 60% over the last year.

‘”China is just a trigger,” Takahashi said. “We will continue to see some fluctuations in the stock markets — in the U.S. and Japan — but from the viewpoint of the valuations and fundamentals and earnings growth process, I think the Nikkei average will likely recover. Still, we have to see some concerted actions from major countries, especially China on economic policy and more public spending or monetary easing.”

The Nikkei index had lost 2,747.77 points — or 13.37% – over the previous five days.

The Dow Jones industrial average — now in a brutal, six-day losing streak — ended down 205 points Tuesday, or 1.3%, to 15,666.44. The Standard & Poor's 500 index lost 1.4. The tech-stocks-heavy Nasdaq closed Tuesday 0.4% lower.